Smartphone sales saw a surge in quarter one of 2021. There is a 26% surge in the smartphone market compared to last quarter. As per Gartner’s research, Samsung has dethroned Apple to occupy the first place in terms of smartphones sold globally in Q1 of 2021. But, Apple phone demand is still high among its loyal fan base.
Globally, Smartphone Market is Recovering from Pandemic
In the first concluded quarter of 2021, the smartphone industry has taken a sigh of relief due to the spike in smartphone sales. Gartner, the research firm, has released the first quarter smartphone sale data.
As per the findings, Samsung ranks first among the most selling smartphone brand globally. The Korean smartphone giant has replaced Apple who occupied the first rank in the last quarter of 2020.
Apple demand is still high globally but Samsung overtook Apple due to its mid-range 5G smartphones priced around $150.
However, Anshul Gupta, senior research director at Gartner, noted that 5G will also continue to be a driver for Apple in 2021.
“Device upgrades will fuel demand for Apple’s flagship phone throughout the year.”
Compared to a downfall of 5% in smartphone sales in Q4, 2020, new year Q1 brought smiles on the faces of smartphone retailers and the manufacturers both. The sale surged by 26% in the March quarter.
Working from home, and spending on discretionary items were the two major reasons identified by the Gartner study behind the spike in smartphone sales.
Talking about the findings in detail, Anshul Gupta, Senior Research Director at Gartner said:
“The improvement in consumer outlook sustained learning and working from home, along with pent-up demand from 2020 boosted sales of smartphones in the first quarter.”
He further added:
“Consumers started spending on discretionary items as the pandemic situation improved in many parts of the world and markets opened up.”
Why Industry is Facing Chip Shortage?
The Gartner report also revealed that the global chip shortage will continue in the coming few quarters also. When smartphone sales will further surge in the coming quarters, the shortage of chips may create major issues for the manufacturers.
The report also stated that chip shortage will affect the average selling price of smartphones. It may go up due to the high demands of electronic devices.
In the coming years, Chip shortage is one of the major hurdles in front of smartphone manufacturers. Chip shortage will directly attack the pockets of smartphone buyers.
But why we are facing a chip shortage? Is it due to the pandemic? No, chip shortage is not linked with the ongoing pandemic. It is due to the demand and supply gap. In the current technological era, we are heavily dependent on electronic devices. All such devices run with the help of chips to process data internally.
So, chip manufacturers are less, and the consumption of chip-oriented devices is exponentially growing. The industry is working hard to increase the chip manufacturing capacity but it will not grow overnight. It may take up to two years for balancing the supply-demand ratio.
Talking about the same issue, Intel chief executive, Pat Gelsinger said at Computex 2021 last month:
“While the industry has taken steps to address near-term constraints, it could still take a couple of years for the ecosystem to address shortages in foundry capacity, substrates, and components.”
The second Covid wave has affected India very badly. Due to that, all business activities are on hold in India that is one of the largest smartphone markets in the World. Samsung mid-range phones are very popular among Indian users. So, it will be interesting to see the Q2, 2021 report. Will Samsung continue the first spot or there will be a change in the ranking?